European Civil Aviation Conference, Paris

Good afternoon, it is a pleasure to address such a distinguished group of leaders in European aviation.

Many times I am asked to speak on very controversial issues such as airport user charges or tearing down the bilateral system. It is a pleasure to speak on safety where we share the same objective.

Safety is our industry's number one priority.

A Proud Record

We can be proud of our record. I don't need to remind you of the difficulty of the last three years—over US$30 billion in losses.

With the price of fuel at record levels, losses of over US$4 billion are expected again this year. Despite these difficulties we continue to heavily invest in safety.

More importantly, you see great improvements in our safety record. The hull loss rate improved 43% over the last ten years. We saw a 24% improvement between 2002 and 2003—which was our safest year ever. The hull loss rate was 0.68 per million departures.

In real terms, we carried 1.6 billion passengers safely last year. Tragically 663 people lost their lives in 2003. Let's put that into perspective. That is a similar number of people lost their lives in 1945 when we carried just 9 million passengers. We will not be satisfied until the number is zero.

We are proud of the progress but significant regional differences remain. Europe, North America and Asia Pacific have the best records on safety. But average hull loss rates in the Middle East, Africa and Latin America are several times higher than the world average.

Improvement has been realised in the Middle East. Latin America and Africa show no improvement on 10-year average hull loss rates. The ICAO Universal Safety Oversight audit programme tries to ensure a common level of safety oversight. But we must remember that some countries simply have more resources than others.

Global Solutions Required

A global industry requires global solutions. IATA has delivered global solutions to the air transport industry for the past 60 years.

Standardisation is critical to improving safety. It is also IATA's core strength. Our Board has demanded that IATA step up efforts on safety. We achieved the target set in 1994 to cut the accident rate in half. Our latest target is a further 25% reduction over the next 2 years.

To be successful, we must go beyond our traditional approach. We will do this within the framework of the IATA 6 Point Safety Plan which includes:

Safety data management and analysis

Infrastructure safety

Cargo operations safety

Cabin safety

Training

Audits

Individually each is important. Linking them together as a safety management system is a giant step towards zero accidents and no loss of life.

Some parts of this programme are very familiar to you.

The IATA Dangerous Goods Regulations manual is an industry institution.

STEADES is the most effective global airline database for safety analysis. Over 40 airlines contribute to STEADES. And in the first half of this year over 300,000 entries were logged.

We are at the leading edge of ramp safety and worked closely with the FAA on a runway incursion prevention tool.

The newest component is the IATA Operational Safety Audit—IOSA. IOSA is the first international standard safety audit for airline operations. IOSA is for airlines what the ICAO Universal Safety Oversight program is for states.

IOSA—A Piece of the Solution

In 2001, IOSA began with the goal of establishing a global benchmark for airline operational safety. We were not looking for the lowest common denominator. We had two goals:

To raise global safety levels

To make processes simple more effective

We began with a group of airlines with ICAO, the US FAA and Transport Canada. Regulatory participation quickly expanded and now includes:

Australia's CASA

China's CAAC

Saudi Arabia's CAA

The European Commission and the JAA

The French DGAC and

The Scandinavian CAA

Together we developed the IOSA Standards Manual.

The group is active in keeping IOSA up-to-date with the latest trends and regulatory requirements.

Quality assurance is built into the audit program. When we designed our processes, we copied the JAA approach to JAR OPS. Only accredited organisations conduct the audits. Currently there are six organizations which have passed our strict standards and training requirements.

In 2005 the IOSA will be ISO 9000 accredited.

Airlines choose from among the accredited audit organisations and ask for competitive quotations.

Our contribution is IATA's investment in safety. We bear all our own costs to establish and support IOSA. We treat members and non-members exactly the same.

This is our commitment to the industry's safety.

The Results

Even for airlines with well-developed safety programmes, the IOSA results have pointed to improvements.

Our job is not to "fail" airlines but to work with airlines to correct identified deficiencies. Once deficiencies are corrected, the airline is added to the public IOSA registry on the IATA website. The audit is valid for two years. The specific results are kept confidential and only released with the approval of the audited airline.

Safety and Commercial Relationships

Sharing IOSA audits results can help airlines evaluate the safety management systems of their commercial partners.

The IOSA standard is a ready-made, effective and cost efficient tool for such evaluation. Avoiding repeated auditing frees resources to be invested in other areas of safety. Everybody benefits: Governments, consumers and airlines.

Already Star, Oneworld and SkyTeam are on board using IOSA as the alliance standard.

Where are we now?

Airlines

For our members, IOSA is more than a good idea; it is a commitment.

Our 2003 AGM made IOSA a condition of membership. So far, 34 audits are complete and 15 airlines are on the registry. Twenty other airlines have confirmed dates for audits. By the end of 2004 we expect to have conducted 40 audits. And over 40% of these are in Europe.

Regulators

Regulators have an important interest in IOSA. The recent ICAO Assembly recognised the role of IOSA in helping states implement their safety oversight responsibilities. In July, the FAA approved IOSA audits for use in US code-shares. These major milestones place IOSA at the heart of global safety efforts.

I have developed a reputation for not being diplomatic so let me get to my main point. IOSA can help you work more effectively. For example: SAFA is an important a snapshot. IOSA gives you an updated check every two years. It also answers the serious issue of public confidence.

The industry needs a common safety benchmark that crosses borders, alliances, business models and consumer groups. There is no need to re-invent the wheel. IOSA is that benchmark.

And it is available for you to use effectively:

Access the IOSA database

Incorporate IOSA into your safety programmes

Add value to your future initiatives

In closing, I don't need to remind you of the great changes that are taking place in our industry.

Airlines are becoming more cost effective—and we are asking our partners to do the same. And we cannot afford complexity and duplication that do not give value to our customers.

In response to the trauma of the last three years, IATA is leading the industry effort to "simplify the business". This theme runs through everything we do. There may be some interesting parallels for Europe as it defines the mission and goals of the many institutions involved in airline safety.

Let's keep in mind that the success of our industry—including safety—was built on strong and effective standards—not complexity. IOSA is very much in line with that tradition.